Jump to content
Sign in to follow this  

One must see drops in Bitcoin like medicine that is required for Bitcoin to get better.

Recommended Posts

Bitcoin is currently at $11,000+ as I write this. Looking at the charts and historical movements it should surpass $12,000+ on this next leg up. Each leg up is adding far more dollars than the previous leg up and the speed is simply frightening .

 

A lot of media (noise) suggested that Bitcoin would simply crumble and crash once $10,000 was hit. This is not proving to be the case at the moment. It may still happen who knows but the current trend is still strong and intact. 

 

The price action is telling the market that Bitcoin is going higher in the short term. There is a saying that you never bet against the trend. Especially when that trend is super strong like Bitcoin's. What traders and investors have to understand that corrections along the ways are healthy. They must embrace these volatile corrections. If Bitcoin was going up and up without any drops or profit taking then I would be more concerned and extremely worried.

 

One must see drops in Bitcoin like medicine that is required for Bitcoin to get better.

Share this post


Link to post

I agree with that assessment. It is unrealistic to expect a smooth trend upwards without any corrections and pullbacks along the way!

 

My strategy is automated and trades in the direction of the underlying trend; signals are triggered when the short-term price action rejoins the long term trend and it is precisely this sort of pullbacks that fuels such an approach. 

 

That is, when IG actually allows me to place trades which is increasingly not the case. I spent the last week coding an adaptor so that the system can switch to an alternative broker when a signal is triggered and IG has BTC flagged as 'unlongable'. I quite like the REST API provided by IG but it really is no help at all when trades are rejected left, right and centre.

 

My secondary broker's API is not as robust (i.e. required a lot more code on my side to integrate) but it does the job, and the BTC market is always available. Annoying 'cause I now have to keep funds with two brokers but I can't afford to let the system fail if only some of the signals are actually taken.

 

Share this post


Link to post

Luigo your strategy sounds interesting. Care to explain a bit about the signals and automated trades. Sounds to me you are talking about something far more advanced than limit orders. Feel free to educate novices like me!

Share this post


Link to post

Hi there. 

 

Happy to try! I can't claim to be an expert in any form or shape BTW and my strategy is relatively simple. It is fully automated for two main reasons; 1) I have a day job so I can't afford to be glued to the screen all the time and 2) I want the rules to be followed consistently so the automation ensure my own opinions and biases don't get in the way! ;-) 

 

The system uses the IG REST API and trades BTCUSD on a 15-minute bar. It uses two pairs of moving averages to trigger signals; a long term one to determine whether the market is trending up or down, and a short-term one to capture short-term momentum. BTCUSD is obviously on a massive uptrend at the moment but it tends to display smooth short-term bursts followed by small, but sharp sharp corrections. The double MA crossover approach seems to be capturing these moves well. It's rare these days but the strategy has gone short a few times in the past.

 

The system adds an ATR-based stop-loss to every trade which protects it from catastrophic loss. I spent quite a lot of time fine-tuning the stop level to achieve a good balance between containing risk and not being kicked out of trades to quickly.

 

The system also closes any open trades on Friday at 10:00pm which is when IG takes the market offline and re-engages on Saturdays 8:00am.

 

As we've seen repeatedly in this forum, especially over the last few months, IG has been making the market unavailable ('unlongable' I think is the term they use) to manage their risk and that has meant that many of the system's trade attempts have been rejected. This obviously prevents the strategy from being effective as signals can't be acted upon so recently, I have enhanced the system to use Bitmex as an alternative broker.

 

I hope that roughly summarises the approach but please shout with any questions.

 

L   

 

 

 

 

 

Share this post


Link to post

Thanks for sharing. I am just getting going myself with automated trading and back testing a few strategies. In order to use the API into IG do you have some special API client ? 

 

I am personally using PRT to get going but will probably switch to python once i get everything established. 

Share this post


Link to post

Python is my weapon of choice. Lots of good libraries for this sort of thing.

L

Share this post


Link to post

Great info guys thank you for sharing with the community. A well thought out strategy luigo and sounds like you know what you are doing. I need to get to grips with using APIs.

Share this post


Link to post

What put me off reading any more was when I read:-

 

 "best known for popularizing the controversial trading strategy TREND FOLLOWING"

 

It immediately felt like a joke statement.

 

Also there was a list of points of wisdom that looked cheap especially so because the list was just so long my eyes were about to go hungry.

 

Also anything that is included free has got to be suspect.

 

It looked like a website just trying to sell some very ordinary looking books.

 

He looked like a snake oil salesman to me. Sorry!!!!

Share this post


Link to post

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Member Statistics

    • Total Topics
      6,564
    • Total Posts
      29,468
    • Total Members
      39,016
    Newest Member
    Jamespound
    Joined 21/04/19 08:07
  • Posts

    • Looking at Lumber then it seems to me that it needs to hold the $30000 level. If it can defend and hold that then there could be further upside this year. If not then it could begin going down into the late $20000's. This is a personal assumption which now will need to be tested based on current price behaviour.  In my opinion, for any trend followers who are short, they must hold (even if they do not add to their positions on further price declines) until there is a clear trend reversal. This should execute their stop loss / trailing stop. In my opinion, for any trend followers who are waiting on the sidelines that do not want to short, then they must wait patiently until there is a clear trend reversal signalling / indicating a trend reversal to warrant a long trade initiation. 
    • One thing to remember is that Platinum is trading at a cheaper price than Gold. Gold and Silver have left Platinum behind since the rally started back in August of last year. It seems Platinum has had enough and wants to begin to assert some authority on the price action.  Platinum of course has several important industrial uses. I think Platinum will try and hit the $1000 dollar area as that is an important psychological price point and these rallies love nice round numbers as a target. This is seen time and time again in Commodities. Platinum is both an industrial metal and a precious metal.  Platinum is also known at the 'Rich Man's Gold'. This could lead to a reversal in pricing between Platinum and Gold. Platinum should be more expensive than Gold and so there could be a shift in speculative capital from Gold into Platinum. Platinum could attract extra volatility as Gold and Silver are more liquid markets.  I do not know what will happen in the future for Platinum prices but I shall follow the price action closely. Platinum will not follow any of my thoughts or assumptions as to what I think may happen. Platinum is not obliged to follow any of my trading strategies or plans. Platinum may not follow the path I have mapped out in my mind and nor does it have to. Platinum will do what it will do just like any other Commodity. As a trader the key is whether I can profit from the price action or not. Prices can change like the weather and so can traders views and opinions. I know from my experience that on many occasions the price action changes my views and opinions. There is absolutely nothing wrong with that. If this did not happen due to stubbornness, ego or I know best attitude then it would be worth worrying about. 
    • Bitcoin is trying to break out when looking at the 'daily'. It will be interesting if it can and if it does then whether the other 'alt coins' follow.
    • Both Gold and Silver are still following my road map however both have hit an interesting juncture, which could prove to be an early turning point.  I am still favouring the Fib 50% for Gold, a long term reliable Fib level for this market (however it does not occur at a strong price action support level this time so a further deeper retrace could be on the cards) and if that happens then Silver retesting the long term supporting trend line is also on the cards. So much for that, what about the case for the current levels? Gold: Complex form retrace (EWT) completed (that is an A-B-C with internal A-B-C forms on each leg) Pos Mom Divergence at the current price point on Daily and 4 Hourly charts RSI and Stochastic both over sold Credible 1-5 wave down to current price point Bounce off the Fib 38% and associated support zone  Potential Triangle breakout and retest then rally away on 4 Hourly chart Similar on Silver, although perhaps less compelling.  I might expect a further drop on Silver with Gold holding or rallying slowly.  I am Long Gold at the Fib 38% with tight stops just below the turning point for a very low exposure trade.  For me this was worth the small loss if Gold carries on down but there may be another chance to get Long on a near term EWT 1-2.  And maybe Platinum is showing the way...  
    • GBPUSD also still following my road map.  First chance for a rally for me is the Fib 62% zone where the previous channel breakout occurred and a previous retest failed.  Chance for a test of strong support at Fib 6/78% cannot be ruled out and this pair is spiky so could easily occur.  All aligned to directional price action on EUR and AUD as well.
  • Our picks

    • Could the price of pork increase by 78% in China by 2020? - EMEA Brief 18 Apr
      The African swine fever disease has reached Southeast Asia and parts of Europe, including the world’s biggest producer of Pork, China. A prediction from the Japanese bank Nomura, is that this could cause prices to rise by 78% in China by 2020, to 33 yuan per kilogram from 18.5 yuan

      Global PMIs come into focus today, with eurozone and US figures released in the wake of a poorer Japanese number this morning. Pinterest has priced its IPO at $19 per share, above the previously indicated range but still lower than in private funding rounds two years ago.
      • 1 reply
×
×